Credit Suisse offers to buy back $3bn of its own debt

Credit Suisse has offered to buy back SFr3bn ($3bn) of its debt after a bruising week in which the Swiss lender’s financial health has faced intense scrutiny.

The move to repurchase the securities early, which are denominated in dollars, euros and pounds, comes as Credit Suisse has sought to reassure investors over the strength of its balance sheet.

Chief executive Ulrich Körner, who was installed by chair Axel Lehmann in July, has promised to set out a plan to overhaul the lender, strip back its investment bank and increase profitability.

The pressure on Körner to do so has intensified this week after the cost of buying insurance against Credit Suisse defaulting on its debt hit a record on Monday. The bank’s five-year credit default swaps have since eased to under 300 basis points having spiked above 350bp earlier in the week.

Shares in the bank rose 3 per cent in early trading on Friday, bouncing off a record low, but the stock remains down more than 50 per cent this year.

In a statement on the bond repurchases, Credit Suisse said that “these offers are consistent with our proactive approach to managing our overall liability composition and optimising interest expense,” adding that they allowed it “to take advantage of market conditions to repurchase debt at attractive prices”.

In buying back the debt, Credit Suisse is adopting a similar playbook to Deutsche Bank in 2016, when the German lender also repurchased billions of dollars of senior bonds in an effort to assuage concerns over its financial health.

The Swiss bank’s new chief financial officer, Dixit Joshi, was previously Deutsche Bank’s treasurer. Many analysts and investors had already anticipated that Credit Suisse might announce a bond buyback in an echo of the German lender’s move.

Credit Suisse is offering to buy eight sterling or euro-denominated senior bonds worth a total of €1bn and 12 dollar-denominated securities denominated worth $2bn.

The offer for the euro or sterling denominated debt securities expires on November 3, while the dollar-denominated offer lasts until November 10.